Fall -2010

CONSUMER BEHAVIOUR

CB Course Outline @ a glance

Course methodology
Chapter slides supplemented by Current articles Ad show reels Class exercises Prescribed textbook Consumer Behavior, by Schiffman and Kanuck 10th edition

CB Class rules
No texting / talking in class
Please come prepared in advance Active participation Be open to new ideas

CB Mark Allocation

CB- Exam structure

Mix of the following
Cases (Indian HBR) Conceptual questions

Objective questions

One group project (CB Audit) Quizzes are n-1 (4); will be announced

CB-What you will study?

1. Introduction the impact of the digital revolution on

consumer behavior 2. Consumer Research 3. Consumer Motivation 4. Personality and Consumer Behavior 5. Consumer Perception 6. Consumer Learning 7. Consumer Attitude Formation and Change 8. Communication and CB 9. Social Class and CB 10. Influence of Culture on CB

CB Contact info.
My office no.: 99033-2408
My cell no. 0322-265-4545 (call 9-8pm only) My email: jc-ubl@hotmail.com CB Website:

http://groups.yahoo.com/groups/cbiba CR nomination: ?

INTRODUCTION: THE IMPACT OF THE DIGITAL REVOLUTION ON CONSUMER BEHAVIOR

Chapter 1

The Digital Revolution

Digital revolution has introduced drastic changes in the

business environment: Consumers have more power than ever before

They can use the Internet to locate best prices, bid on offerings, bypass distribution outlets, and shop for goods around the globe from their homes.

Consumers have access to more information than ever

before

They can easily find reviews on products; compare products at the click of a button.

Marketers can offer more services and products than ever

before

The digitization of information enables sellers to customize the products and services and their messages to customers.

The exchange between and customers is increasingly

interactive and instantaneous.

The Digital Revolution

Marketers can gather more information about consumers more quickly

and easily (cookies?) Impact reaches beyond the PC based connection to the web (mobile phones-kiosks-TVsAirplanes; even refrigerators!)
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Consumer Behavior
Defined as the behavior

that consumers display in searching for, purchasing, using, evaluating, and disposing of products and services that they expect will satisfy their needs. Simply, why consumers buy what they buy

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CB is multi dimensional

Mexican food is spicy and famous the world over

Pakistanis love spicy food

Mexican cuisine will be successful in Pakistan

Middle class Pakistanis are concerned about hygienic grocery items

Therefore, they are willing to pay a premium

Will Meat Shop be successful? (others werent)

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You are what you buy

Sony Cybershot ad.

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Types of Consumers
Personal consumer: buys goods and services for his or

her own use, for the use of the household, or as gift for a friend. Organizational consumer: includes profit and not for profit businesses, government agencies, and institutions, all of which must buy products, equipment and services in order to run their organizations.

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Model of Consumer Decision Making

Firms marketing efforts (4 Ps )
Socio cultural environment Family-Informal sources-Social ClassCulture & subculture Other noncommercial sources

Need recognition Pre purchase search Evaluation of alternatives

Psychological Field
Motivation Perception Learning Personality Attitudes

Purchase
Trial Repeat Purchase

Experience Post purchase evaluation

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Development of the Marketing Concept

Production concept: assumes that consumers are mostly

interested in product availability at low prices. Product concept: assumes that consumers will buy the product that offers them the highest quality, the best performance, and the most features. Selling concept: marketers primary focus is selling the product that is has unilaterally decided to produce

Marketing concept?

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Role of Consumer Research

Describes the process and tools used to study consumer behavior
Positivist approach: objective and empirical, to

seek causes for behavior, and to conduct research studies that can be generalized to larger populations. Interpretivist approach: qualitative and based on small samples

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Market segmentation
Is the process of

dividing a market into subsets of consumers with common needs or characteristics.

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Targeting
Is selecting one or more of the segments

identified for the company to pursue.

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Positioning
Is developing a distinct image

for the product or service in the mind of the consumer, An image that will differentiate the offering from competing ones and communicate to consumers that the particular product or service will fulfill their needs better than competing brands. Ad show reel:

Nike Evian Vanilla Coke Cadbury

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Marketing mix

Consists of a companys service and /or product offerings

4 Ps

to consumers and the methods or tools it selects to accomplish the exchange.

Product or service (features, designs, brands and packaging

offered, along with post purchase benefits such as warranties etc) Price (list price, including discounts, allowances, and payment methods) Place Promotion (advertising, sales promotion, public relations, and sales efforts designed to build awareness of and demand for the product or service)
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Societal marketing concept

Requires that all marketers adhere to principles of social

responsibility in the marketing of their goods and services.

That is, they should endeavor to satisfy the needs and wants of their

target markets in ways that preserve and enhance the well being of consumers and society as a whole. Ads: UBL Water Purifier / IDP

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Customer value
Defined as the ratio between the customers perceived benefits (economic, functional, and psychological) and the resources (monetary,

time, effort, psychological) used to obtain those benefits. Discussion question: Which brands score highest on value?

Value = Benefit Costs

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Customer Satisfaction
Is the individuals perception of the performance of the product or service in relation to his or her expectations. Ad show reel
AMEX

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Customer retention
The overall objective of providing value to

customers continuously and more effectively than the competition so that they dont stop being your customers. Benefits of loyal customers:
They buy more products. They are less price sensitive and pay less attention to

competitors advertising. Servicing existing customers who are familiar with the firms offerings and processes, is cheaper Loyal customers spread positive word of mouth and refer other customers.
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